Fact based stock research
Cerence (NasdaqGS:CRNC)

US1567271093

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Cerence stock research in summary

cerence.com

ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), Cerence (Application Software, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Cerence are a good value (attractively priced) with a consolidated Value Rank of 68 (better than 68% of alternatives), are safely financed (Safety Rank of 78, which means low debt burdens), but show below-average growth (Growth Rank of 10). ...read more

RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on Cerence's financial characteristics. As the company Cerence's key financial metrics exhibit good value (Obermatt Value Rank of 68) but low growth (Obermatt Growth Rank of 10) while being safely financed (Obermatt Safety Rank of 78), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 68% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	68
Growth Rank	10
Safety Rank	78
Combined Rank	61

Country	USA
Industry	Application Software
Index	NASDAQ
Size class	Medium

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Cerence

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	42	65	79	68
GROWTH
GROWTH	86	27	21	10
SAFETY
SAFETY	7	44	83	78
SENTIMENT
SENTIMENT	n/a	57	25	^new
360° VIEW
360° VIEW	n/a	49	58	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Cerence is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	42	65	79	68
GROWTH
GROWTH	86	27	21	10
SAFETY
SAFETY	7	44	83	78
COMBINED
COMBINED	50	34	85	61

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Cerence the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 68 (better than 68% compared with alternatives), Cerence shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Cerence. Price-to-Sales (P/S) is 89, which means that the stock price compared with what market professionals expect for future sales is lower than for 89% of comparable companies, indicating a good value concerning Cerence's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 85% of alternatives (15% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 1, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 68, is a buy recommendation based on Cerence's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Cerence may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	40	60	84	89
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	52	56	83	1
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	76	78	89	85
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	42	65	79	68

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cerence; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 10 (better than 10% compared with alternatives), Cerence shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Cerence. While Profit Growth has a good rank of 94, as professionals currently expect the company to grow its profits more than 94% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 1, which means that currently professionals expect the company to grow less than 99% of its competitors, while Capital Growth has a rank of 17 and Stock Returns have been below market median, with a rank of 4 (96% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 10, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	47	75	4	1
PROFIT GROWTH
PROFIT GROWTH	n/a	35	94	94
CAPITAL GROWTH
CAPITAL GROWTH	n/a	43	16	17
STOCK RETURNS
STOCK RETURNS	83	17	19	4
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	86	27	21	10

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cerence.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2024, the company Cerence has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cerence is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Cerence and the other two below average. Refinancing is at 96, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 96% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 42, meaning the company generates less profit to service its debt than 58% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), Cerence has a financing structure that is significantly safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Cerence are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Cerence and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	12	37	46	36
REFINANCING
REFINANCING	43	45	73	96
LIQUIDITY
LIQUIDITY	36	50	48	42
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	7	44	83	78

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cerence and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	74	20	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	67	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	13	18	^new
MARKET PULSE
MARKET PULSE	n/a	68	53	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	57	25	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cerence.
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